ASSESSOR: Expect 3% drop in town-wide property values

Tuesday

Anyone expecting the bottom to drop out of Barnstable’s property assessments will have to wait at least another year.

Anyone expecting the bottom to drop out of Barnstable’s property assessments will have to wait at least another year.

Barnstable Assessing Director Jeff Rudziak is anticipating about a 3 percent drop in town-wide property values when the fiscal year 2009 values are completed.

This round of assessments will be based on fair market values as of Jan. 1, 2008, after an analysis of the prior 12 months of arm’s-length transactions. With values based on calendar year 2007 sales, it necessarily creates a lag in values when the market is either increasing or, in this case, decreasing in value.

Arm’s-length transactions do not include foreclosures or short sales, as more than market forces are in play.

“We obviously can't use those,” Rudziak said of distress sales. “They were dumped on the banks and lenders, and if you’re them, you look to get rid of it as fast as you can.”

Rudziak said that distressed sales eventually get reflected in market-rate sales when property owners are forced to compete with the sale of similar distressed properties.

“What it ends up doing is affecting the competitive market,” Rudziak said.

In certain pockets of town and in the upper reaches of property values, Rudziak said that values are seeing slight gains, as they aren’t experiencing the same market pressures.

What that will eventually translate into are adjustments in the low- to mid-range properties.

According to the Barnstable County Registry of Deeds, the Cape-wide total value of sales was down 6 percent from the prior year, the median sales value was down 5.5 percent and the volume of sales for 2007 was down 1.2 percent.

Rudziak said that his preliminary numbers for the Town of Barnstable are consistent with other Cape towns already through their FY’09 revaluations. Barnstable’s quarterly tax billing practice allows for a wider window to get property assessments approved by the state Department of Revenue.

The town’s assessment of commercial properties, which relies heavily on the lease income a commercial property produces, is not expected to move much at all, according to Rudziak.

Last year, residential properties carried 89.8 percent of the tax load, with commercial/industrial/personal property classes picking up the remaining 10.2 percent. The percentages are based on how much of the town’s $14.8 billion in total property values is distributed among the different property classes.

After the 2004 revaluation, which saw a significant increase in residential values and a lower proportional increase in commercial values, about $4 million in taxes shifted away from commercial to residential properties, Rudziak said.

Barnstable has a single tax rate for all classes of property. The tax policy for FY2009 is expected to be before the town council in late November.

Over the coming years, if residential values drop and commercial properties hold steady, the tax burden between residential and commercial can be expected to shift more heavily toward commercial properties.

Barnstable moved to annual adjustments in property assessments after 2004, which saw enormous increases in value for some shorefront property owners. Those increases were a result of the three-year gap in updating values and a surging Cape real estate market.

While the interim adjustments are based on the same evaluation methods, the state-required three-year revaluation is a more intense process.

Rudziak said that the focus of the state over the coming three years is to ensure proper values for commercial properties.

“That will be the focus for FY’09, 10 and 11,” Rudziak said, “the quality of the commercial values.”

Confirming Qualified Residents

In advance of the 2010 revaluation, the assessing division will seek to reconfirm residents eligible for the residential exemption.

The exemption is available to year-round residents on their primary home and provides an assessment credit against the total taxable value of a property. For the past three years, Barnstable adopted the full 20 percent exemption, resulting in roughly a $500 annual credit for residents.

The first year of the program, FY’06, saw some errors in eligibility, with some qualified for the exemption missing out and some not qualified getting a break.

A program adopted last fall seeking residents who may have missed out identified 44 property owners, all of whom were reimbursed for FY’2006. Rudziak said that $28,000 of the $30,000 appropriated for the program was used. That reimbursement program ended in June.

Postcards will be sent out next spring to reestablish the list of eligible property owners in advance of the revaluation.

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